Nigeria will hold a non-deal road show in London next week, government sources said, as Africa’s biggest economy explores fund-raising options to finance a record budget deficit widened by the fall in vital oil revenues.

Finance Minister, Kemi Adeosun and officials from the central bank and Debt Management Office, DMO, will meet investors next Tuesday to update the market on government policies. Standard Chartered Bank is organising the meeting, the source said. Nigeria plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit that has slashed revenues and weakened the naira.

“It’s non-deal road show to explain government policy to investors. There’s no transaction. It’s been a while since the government came to London to update investors on what’s happening,” he said.

Director General, DMO, Abraham Nwankwo told Reuters last week Nigeria is likely to sell a euro bond this year. Nigeria has pushed ahead with some reforms meant to free up cash to invest in badly needed infrastructure, but critics worry about the pace, given the loss of oil revenues and a currency peg that has caused the economy to contract.

In mid-May the government hiked petrol prices by 67 percent to N145, ending an expensive subsidy scheme that has cost it billions of dollars. It used a rate of N285 to the dollar to set the prices, compared with an official rate of N197. The move prompted the central bank to abandon its 15-month naira peg to the dollar to adopt a flexible currency regime, a policy U-turn designed to boost exports and local manufacturing and to stave off a recession.

But the bank has yet to clarify how the new policy announced last week will work, spooking foreign investors long worried about getting caught in the middle of devaluation. President Muhammadu Buhari for months rejected calls to devalue the naira. However, during his Democracy Day speech on Sunday he backed the central bank’s decision to move away from a currency peg that is seen as overvaluing the naira.

A banking source in London told Reuters that the market was in the dark over the central bank’s new currency policy.“The reason why Nigeria is reluctant to come to the market is that the government knows investors will ask about the currency issue,” the banker said. (The Guardian)

•Photo shows Kemi Adeosun.

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